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FCA reviews IFA compliance with anti-money laundering rules

The FCA has written to at least five advice firms to review their compliance with anti-money laundering rules, Money Marketing has learned.

One advice firm recently had a half day visit from the FCA, Money Marketing understands, as the regulator asks firms to talk through their processes to make sure they are compliant with the rules.

The review has included at least one firm that is a sole trader, and has asked for two years of anti-money laundering reports from another firm’s anti-money laundering officer, according to a source familiar with the FCA’s work.

Another source noted that the FCA also wanted to confirm who was the designated money laundering officer at firms, and is attempting to arrange some meetings with them.

The FCA is currently consulting on how to implement the Fourth Money Laundering Directive. This will require firms to identify and make risk assessments over how money laundering and terrorist financing could affect their business, while the register of politically exposed persons is also set to be updated to include UK-based individuals.

Preparing for the new anti-money laundering rules

Compliance and Training Solutions director Mel Holman says: “What checks smaller firms were doing against the sanctions list has been in place forever, it was from HMRC, but there was no specific rule in the FCA handbook…Smaller firms, specifically sole traders, could get caught out on the PEPs register; most firms implement checks when they first take on a client, but how often do they re-check?”

The FCA says that the work was part of its regular, proactive supervision activities, and is being conducted with a random sample of firms that is not specifically focused on IFAs.

Last year, the FCA fined the UK arm of Bangladesh-based bank Sonali £3,250,600 for failing to have adequate anti-money laundering systems in place over a four-year period.


FCA fines bank over £3m for anti-money laundering failures

The FCA has fined the UK arm of a Bangladesh-based bank £3,250,600 for failing to have adequate anti-money laundering systems in place over a four-year period. Sonali Bank (UK) has also been prevented from accepting deposits from new customers for 168 days. The bank’s former money laundering reporting officer Steven Smith has been fined £17,900 […]

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FCA joins Deutsche Bank anti-money laundering probe

The FCA is in the early stages of investigating whether Deutsche Bank breached anti-money laundering laws for its Moscow clients. The FT reports the FCA’s involvement adds to inquiries by at least two other bodies around the world into so-called mirror trades executed in London and Moscow by the bank. Earlier this week, it was […]


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. So on what basis were these no doubt intrusive visits based on?

    Were the firms dealing with Russian Oligarchs, Middle Eastern or Asian potentiates?

    I would contend that the vast majority of advisers deal exclusively with perfectly ordinary UK citizens and that reports of this nature are pure scare tactics without a deeper analysis of why the visits were carried out and some indication of the profile of the firms involved and the type of clients with whom they deal. I think this information would be illuminating.

  2. FCA no longer consulting on the Fourth MLD – it came into play in June.

    And to Harry Katz – why should FCA not visit firms randomly to see if they are following the law ? Assume none of us are suggesting that our industry should act unlawfully?

    • Because as In said random is costly and a waste of time. Accurate profiling is the way to go. Who deals with African, Russian, Asian and Middle Eastern clients – this should at least yield some results.

      It’s not as if the FCA hasn’t got much else to do. I do wonder what and how they prioritise.

  3. Use smart search, they will do all of those checks for you if you’re not sure!

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